ESMA has updated the questions and answers document on commodity derivatives issues under MiFID II. The updated document can be found here.  There are 3 new questions and 1 updated one:

Position Limits

• Q10 – p19 (Updated)- Limits on “C10” derivatives – Should be set on freight derivatives and indices using open interest.
• Q16 – p21 – What happens if a limit is both illiquid/new (and therefore has a limit of 2,500 lots) AND has a small number of market makers ( so the limit can go up to 50%)? – The NCA can choose where the combined spot month and other moths limit is over 5,000 lots, using the criteria specified in RTS 21.
• Q17 – p22 – How are limits set on spread contracts? – If the constituent contracts that comprise the spread have a limit, then the position should be disaggregated to those limits. Otherwise the spread contract itself will receive a limit using the open interest of spot month and other months.

Position Reporting

• Q21 – p37  – Where should EEOTC positions that have more than open contract as equivalent where the underlying are run by different NCAs be reported (for investment firms) ?  – the investment firm should make a choice and report to one of the NCAs only.

There has not been an updated for some months (see here for the previous version).